Why having a reliable and reputable accountant to maintain your accounts is critical

Time and time again we hear how a business owner or director will file their own tax return, and how they do not need an accountant. This is almost as common as someone who, rather than source a reputable accountant, uses a friend, who “does accounts” or takes on the task themselves, in order to save money. However this short-sighted cost cutting could cost you dearly in the long-run, as a Middlesex based director recently found out.

Failing to maintain accounting records, director of Sky Masters Travel Limited (“Sky Masters”), a travel agent based in Wembley, North London, has been disqualified from acting as director for a lengthy eight years. Sky Masters went into liquidation owing £428,134. During the liquidation The Air Travel Trust submitted a proof of debt for £391,643 for refunds to passengers who were unable to travel. Due to the lack of accounting records, the Civil Aviation Authority was unable to deal with all passenger claims as it was impossible to explain the company’s trading. As a result many passenger claims were rejected and they have been left out of pocket.

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This comes only one month after the owner of a Liverpool taxi firm was disqualified from acting as a director of a limited company for eight years for failing to pay tax or keep proper accounting records following an investigation by the Insolvency Service.

Stewart Goldsmith, Manager at Portland commented:
“The substantial period of disqualification in both cases reflects the fact that when a company fails to keep adequate financial records it is simply not possible to determine whether there has been other, more serious, impropriety in relation to the management of its affairs.’ The bottom line is that it is the responsibility of the director/s to keep proper records and have a reliable accountant in place to deal with its affairs. Fail to do this and you are leaving yourself open to scrutiny, and ultimately the Insolvency Service will investigate and could seek to remove you from the marketplace.

At Portland we try to ensure that directors are protected from prosecution by complying with their responsibilities, without curtailing their entrepreneurial spirit.”